Replacement of lost income, in the event that you pass away prematurely, is the most important reason people seek a life insurance policy. You want to know that your dependents will be financially secure after you’re gone. This means replacing your income, ensuring that your family retains their lifestyle, and covering expenses they might incur in your absence.
A needs assessment will focus on those types of expenses. However, there are other primary functions of life insurance, that will also make their way into the equation. When weighing your options and deciding how much life insurance you need to purchase, consider the following ways in which the policy will protect your loved ones.
Funeral and burial often costing five figures.
Medical bills. Both serious illnesses ands of dollars in bills.
Mortgage payments. Most of us couldn’t afford our current homes on one income. If your family depends on you to cover the mortgage payments, you would likely want them to keep their home in the event that something happens to you.
Estate taxes. If your assets exceed certain limits, your heirs could face significant estate taxes. Your life insurance policy can help to offset that expense.
Other outstanding if those debts are significant.
Legacy. This relates more to your personal wishes. Do you hope to leave a legacy, in the form of a charitable donation? A life insurance policy can help you achieve a lifetime goal, even after your death.
Cash value. Some life insurance policies build cash value, which you can borrow against during your lifetime. This might or might not appeal to you, but it’s yet another thing to consider as you compare life insurance policies.
If you’re a business owner, you will have additional concerns beyond the ones listed above. As you shop for life insurance, remember that we can help you. Give us a call and differentiate the types of life insurance policies so that you can identify the one that best meets your needs.